'Mines to Market' maps new diamond landscape

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'Mines to Market' maps new diamond landscape

May 02, 2007

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Mumbai, India—Diamond supply, liquidity and synthetics were on the docket as international delegates convened for the second International Diamond Conference: Mines to Market, organized by India's Gem and Jewellery Export Promotion Council (GJEPC).

The event, held from April 26-27, featured speakers representing various parts of the global diamond pipeline, including India's diamond industry.

Chief Minister of Maharashtra Vilasrao Deshmukh inaugurated the meeting along with dignitaries including GJEPC Chairman Sanjay A. Kothari; assistant minister to the prime minister of the Republic of Angola Aguinaldo Jaime; Botswana Minister of Minerals, Energy and Water Resources P.H.K. Kedikilwe; and Indian Minister of State for Commerce and Industry Jairam Ramesh.

Ramesh opened the meeting by noting India's support for the process of benefication in African countries. Deshmukh added that India's government was looking to develop a second export zone near Mumbai to complement the full-to-capacity SEEPZ.

Industry expert Chaim Even-Zohar moderated the proceedings, noting that the diamond business was changing dramatically from 350 unbroken years of centralized distribution from London, to a fragmented rough supply that is now distributed by producing countries who have local benefication and development high on their agendas.

In terms of rough sourcing for India, Praveen Shankar Pandya, GJEPC rough-sourcing sub-committee convener, said the organization had helped create Diamonds India Limited (DIL), a rough-buying company floated with the equity from 60 leading diamantaires. DIL is willing to invest as much as $1 billion to secure direct supply of rough diamonds for the country, he said.

Delegates also heard from representatives from De Beers, Rio Tinto Diamonds and Alrosa. Representing the latter, Sergei Vybornov told attendees the Russian diamond company would not favor sales to local cutting shops, but was looking to an open international sales format.

Other speakers highlighted issues such as profitability, with Eurostar Chairman Kaushik Mehta noting that his firm had been successful partnering with Hearts On Fire; former World Federation of Diamond Bourses President Shmuel Schnitzer calling on mining companies to consider extending credit to diamond manufacturers who are finding the current lending environment increasingly difficult to manage; and Ketan Parikh, senior partner with Mahendra Brothers Export Pvt. Ltd., who said there needed to be an international system to deal with the inevitable influx of synthetic diamonds in the marketplace.

Day one concluded with Martin Rapaport, who gave his perspective on the industry's need to take an active role in helping Africa's impoverished alluvial diamond miners.

Among the topics breached on day two of the conference were benefication in producer countries, emerging trading hubs such as in Dubai, United Arab Emirates, and retail.

Kedikilwe of Botswana emphasized his country's need to develop a secondary diamond industry to create jobs, transfer diamond skills to locals and look for opportunities to work with traditional global diamond centers.

Angolan Minister Jaime said his country is economically stable after 30 years of civil war and is open to direct foreign investment.

With regard to industry financing, Loet Kniphorst of ABN Amro, and Bharati Rao, managing director of the State Bank of India, spoke of their concerns regarding the high level of debt and long payment terms that are commonplace in the industry. Rao noted her bank would not be averse to financing man-made diamond manufacturers.

Wrapping up the event were J.C. Penney Executive Vice President Beryl Raff and the GJEPC's Hemant Shah who urged the industry to unite in its efforts to promote jewelry as a luxury product.

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